On November 20, 1987, China's first KFC restaurant opened in Qianmen, Beijing. The store was full of seats, and there were busy traffic outside the store. The Yangko show was celebrated. KFC allowed people to recognize and eat Western fast food.

Only three years later, KFC's brother brand, Pizza Hut, which specializes in pizza, also entered China and opened its first store in Beijing. For decades since then, Pizza Hut became popular throughout China and once became synonymous with pizza.

Picture / Information picture of Frank Carney, co-founder of Pizza Hut Picture source: Internet

According to media reports, Pizza Hut co-founder Frank Carney (Frank Carney) died of pneumonia in the early morning of December 2 at the age of 82. Carney has just recovered from the new coronary pneumonia, but he has already suffered from Alzheimer's disease. Ten years.

The death of Carney renewed attention to Pizza Hut, the world-renowned "pizza empire", and also triggered discussions on Pizza Hut's operations in China.

01

Pizza Hut "Pizza Empire"

In 1958, 19-year-old Carney was still a college student. He and his 26-year-old brother borrowed 600 US dollars from his mother and opened the first pizzeria in Carney Market near his home. This is the predecessor of Pizza Hut.

A year later, Pizza Hut formally established a company in Kansas and opened the first franchised Pizza Hut restaurant in the state. It was not until the 1970s that Pizza Hut began to transform into a commercial chain.

Since then, Pizza Hut started the "Running Mode" and expanded rapidly in the United States, with stores all over the United States. Later, it went out of North America and entered the global markets such as Germany, Australia, the United Kingdom, and Japan. By 1971, Pizza Hut opened 1,000 stores worldwide, and opened in New York. Listed.

Pizza Hut had more than 4,000 stores worldwide by 1977, but PepsiCo acquired Pizza Hut for $300 million in that year.

In 1997, PepsiCo spun off KFC, Pizza Hut, and Teke Bell Catering and other brand businesses to form the Yum Catering Group. Yum Foods Group is accelerating the expansion of Western-style food and beverage brands such as KFC and Pizza Hut globally, including the Chinese market.

According to the ranking of the “25 Most Valuable Food and Beverage Brands in the World in 2020” released by the British brand assessment agency Brand Finance, Pizza Hut ranks sixth with a brand value of US$5.434 billion.

2

Pizza Hut in China

In 1990, Pizza Hut opened its first store in Dongzhimen, Beijing. Just like the opening of Western-style fast food such as KFC and McDonald's, Pizza Hut's entry into China caused a "pizza whirlwind."

After entering China, Pizza Hut has adopted the "light luxury" route, which is sought after by consumers, especially young people. The situation of queuing for meals often occurs. This situation is not inferior to the pomp of the current online celebrity milk tea shops when they queue up. It has become a good place for many young couples to have dates and dinners.

Picture / Pizza Hut Dongzhimen Store Picture source: Internet

For more than ten years since then, Pizza Hut can be said to be synonymous with pizza in the Chinese market, completely occupying the mental resources of customers. As long as people think of eating pizza, they will first think of Pizza Hut.

Pizza Hut brought Western-style simple meals represented by pizza and steak to China, and once became a popular Western food brand born in the 70s and 80s. Pizza Hut can be said to be the "enlightenment brand" of western food for the Chinese public, showing its great influence.

2020 is the 30th anniversary of Pizza Hut’s entry into China. According to information on Pizza Hut’s official website, Pizza Hut has more than 2,200 restaurants in China and is still accelerating the opening of stores.

However, in the past decade or so, the Chinese catering market environment has undergone earth-shaking changes, and Pizza Hut's market influence in China is far less than in the past.

According to the prospectus published by Yum China in September this year, KFC's contribution to the company's revenue reached 68.8%, which shows that the contribution rate of Pizza Hut and other catering brands continues to decline, especially the influence of Pizza Hut is getting weaker.

Operating data shows that Pizza Hut’s revenue growth is extremely unstable, and even showed negative growth in 2019. The same-store customer unit price has been reduced for two consecutive years. At the same time, the impact of the epidemic at the beginning of this year was greater, and Pizza Hut's same-store sales fell as much as 22%.

3

Pizza Hut China encounters a "mid-life crisis"

"Pizza Hut has encountered a mid-life crisis", "Pizza Hut is going downhill in China", and "Pizza Hut is not seen in China" have become the market's discussion of the views of Pizza Hut China.

In fact, Pizza Hut's business history and current situation directly reflect the changes of the times in China's catering industry in the past decade.

From the perspective of catering market demand, Chinese consumers’ income has increased, they have higher and higher requirements for the quality of life, and they also pay more attention to health. Today, people are far from confined to common Chinese catering and fast-paced Western fast food. Tend to diversified catering needs.

Changes in consumer demand will surely accelerate the ecological changes in the catering industry.

From the perspective of Pizza Hut's field, Pizza Hut used to be a "dominant one", but then more and more innovative brands appeared and gradually seized Pizza Hut's market. For example, brands such as Le Caesar, which focuses on durian pizza, are a representative case. . At the same time, international brands including its rival Domino's are also accelerating their deployment in the Chinese market, and market competition will only increase fiercely.

Nowadays, more and more Chinese-style catering brands are rising, Chinese fast food, Chinese simple meals, special Chinese food, especially in recent years, local characteristic branding, characteristic catering brand chain trend is obvious, competition is more intense, the rise of Chinese characteristic chain catering brand Western fast food brings more challenges.

Of course, Pizza Hut did not seek improvement. In recent years, it has been accelerating its localization and diversification strategy. It has boosted its performance by launching diversified products such as crayfish pizza, Beijing roast duck pizza, and crayfish lasagna. It took 18 months to turn Pizza Hut’s same-store sales back into profit.

At the same time, Pizza Hut has launched continuous brand trials in China. In 2018, it carried out a round of brand upgrades and opened the first "Explorer Restaurant" in Nanjing, with new products accounting for 40%.

Pizza Hut is focusing on the new generation of consumer groups, meeting the needs of the new generation of consumer groups for restaurant environment, food products and dining experience, and comprehensively upgrading the Pizza Hut brand concept system, trying to make Pizza Hut younger.

The competition in China's catering track is extremely fierce, and all catering brands dare not slow down. If Pizza Hut wants to return to its peak, it must be based on the market, and it must continue to innovate its brand and accelerate its brand localization, rejuvenation, and distinctiveness, in order to win consumer recognition.

Pizza Hut’s business changes have once again explained to us a business principle. The market is always changing. The only way to grasp the change is to actively innovate and change. Otherwise, it will be marginalized by the market and eventually eliminated by the market.